uploads///Telecom Sprint Q Debt Liquidity

Analyzing Sprint’s Liquidity Position

Ambrish Shah - Author

Nov. 28 2017, Updated 9:02 a.m. ET

Sprint’s liquidity and debt

Over the last few quarters, Sprint (S) has been the only major US wireless player struggling to deliver profits. The top four US wireless players are T-Mobile (TMUS), AT&T (T), Sprint, and Verizon (VZ). Sprint reported a net loss of $48 million in fiscal 2Q17 (ended September 2017) and a net loss of $142 million in fiscal 2Q16. The telecom company reported EPS (earnings per share) of -$0.01 in fiscal 2Q17, a significant improvement from its EPS of -$0.04 a year earlier.

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Furthermore, Sprint reported general-purpose liquidity of $11.4 billion at the end of fiscal 2Q17, which includes $6.4 billion in cash, cash equivalents, and short-term investments. Additionally, the telecom company has ~$855 million available under vendor financing agreements, which will be used for the procurement of 2.5 GHz (gigahertz) network equipment.

Sprint generated $420 million in adjusted free cash flow in fiscal 2Q17. Sprint’s balance sheet is constrained, with ~$38.4 billion in total debt and ~$0.63 billion in debt maturities over the next four quarters.

Sprint’s financial strategy

Sprint’s management has highlighted that the company has moved ahead with the implementation of its financial strategy by diversifying its funding sources, reducing its cost of capital, and lowering its future cash interest expenses. As a result, liquidity initiatives have helped ease concerns about Sprint’s ability to meet upcoming debt maturities and financing obligations.


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